THE sugar industry said it supports the newly approved round of imports, but added that any reserves built up with foreign sugar must not interfere with the start of the milling season, where prices for domestically-grown sugar are set.
“As a buffer stock, the 150,000 MT might just be enough. The key is in the timely release and volume at which such buffer stock will be introduced in the market,” Enrique D. Rojas, president of the National Federation of Sugarcane Planters, said in a text message.
The Sugar Regulatory Administration (SRA) approved Sugar Order (SO) No. 7 which authorizes imports of 150,000 metric tons (MT) of sugar.
The shipments are required to arrive not later than Sept. 15, which means volumes will be on hand when the harvest starts being brought in for milling, making the supply-demand situation largely a matter of when the government opts to release stocks.
“The intention of this sugar import program is to ensure sufficient actual supply of sugar for domestic consumption, as well as a two-month buffer stock,” according to SO 7.
SO 7 is the third import program for the crop year 2022-2023 and the second for this year.
In February, the SRA approved SO 6, which allowed the entry of 440,000 MT of refined sugar intended to augment the shortfall in sugar output and help bring down the retail price of refined sugar.
The shipment was privately awarded to three entities — All Asian Countertrade, Inc. (240,000 MT); Edison Lee Marketing Corp. (100,000 MT); and S&D Sucden Philippines, Inc. (100,000 MT).
However, despite the imports from SO 6, the SRA “finds it imperative to open a second import program to address the demand” due to the further reduction in domestic sugar production.
The new sugar import program will “bridge the gap between supply and the demand,” as well as increase buffer stock volumes, according to SO 7.
According to SO 7, the sugar import program is open to “duly registered SRA international sugar traders in good standing; and compliant with the documentary requirements of the SRA/government.
Manuel R. Lamata, president of the United Sugar Producers Federation of the Philippines, also backed SO 7 as it will account for the delayed milling season this year.
“This will act as a buffer stock to the delay in the opening of the harvest season from August to September. This one-month delay is good because this will ripen the sugarcane, meaning there will be more sugar to process,” he said.
Mr. Rojas said that the SRA must control the releases as not all mills will start simultaneously on Sept. 1. He estimates that it takes about two weeks for domestically-milled sugar to reach the retailers.
“We expect that SRA will be judicious enough to release the additional imported sugar in a calibrated manner, in such small volumes that will answer the gap in production, so that millgate prices at the start of milling are not adversely affected by this 150,000 MT shipment,” he added.
On Friday, the prevailing price of refined sugar in Metro Manila markets was between P86 and P110, with washed sugar at P82-P90, and brown sugar P78-P90. — Sheldeen Joy Talavera
